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The Finance Minister must do something as far as direct taxes are concerned. There has been a reasonable direct tax collection this time and could be made better provided more rationalisation occurs. The zero-tax limits for senior citizens should be raised to not less than Rs 2 lakh a year. For working women, this should be around Rs 1.75 lakh and for other salaried class it should be Rs 1.50 lakh. Thereafter, slabs should be made for every Rs 50,000. Investments in tax-saving instruments must be encouraged to mop-up more money. The PPF, NSC and insurance policies are the biggest contributors to national saving; these should be given more incentives. The upper limit for investment must be raised to around Rs 1.50 lakh but instruments such as infrastructure bonds (might be included now), ELSS Mutual Funds and Bank FDs must be capped at the upper limit for each individual, for instance, only Rs 50,000 investment per fiscal should be considered for deduction under Section 80C . The remaining shall be covered by traditional instruments such as EPF, PPF, Insurance and NSC. Health insurance should be given priority with section 10D putting the deductible amount at Rs 25,000 instead of Rs 10,000 now.

Alok Kumar, Associate Professor in Management,

School of Management Sciences,

Khushipur, Bachhaon, Varanasi

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